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November 23, 2017

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County to again review strip club kickbacks for cabbies

Long-simmering issue of strip clubs paying bonuses for customers goes before County Commission once again

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Leila Navidi

A taxi leaves Deja Vu Showgirls in April. Several strip clubs pay cabdrivers bonuses to bring in customers, but several topless clubs want the Clark County Commission to crack down on the payments.

Larry Brown

Larry Brown

Sheriff Doug Gillespie

Sheriff Doug Gillespie

As a professional poker player, Steve Graham is no stranger to the idiosyncrasies of Las Vegas. But he couldn’t believe it when, during a December visit, he was told cabdrivers would pay passengers for the privilege of dropping them off at the cabbie’s topless club of choice.

Then he and four friends discovered for themselves that such deals could be had.

After going from cab to cab at Mandalay Bay, they found a driver who agreed transport them for free, give them each $30 — $150 total — in exchange for dropping them at Sapphire gentlemen’s club.

Graham said that upon arrival the driver handed them each $30, which covered the club’s entrance fee. “I thought I’d heard it all,” said Graham, 30, who now lives in Illinois. “It certainly opened my eyes.”

The cabdriver, of course, didn’t leave the club empty-handed. Las Vegas cabdrivers have long received kickbacks for delivering customers to certain businesses. Such payments from strip clubs currently range “up to $120 per head,” according to Las Vegas attorney Al Marquis, who is representing several topless clubs that want the county to crack down on the payments.

No one knows the exact amount of the payments — strip clubs don’t exactly hand out 1099 tax forms every time a cabdriver pulls around back to take a kickback. But in a class-action lawsuit filed in June, it was alleged that some clubs pay as much as $100,000 a week to cabdrivers who bring in customers.

But that might be changing. (Put the emphasis on “might.”)

Clark County Commissioner Larry Brown is asking colleagues to discuss the payments at their meeting Tuesday. Brown said he agreed to raise the issue after being approached by various “stakeholders.”

“I don’t have a strong position on it,” he said. “I don’t even know the scope of the issue. It’s just an issue that has tentacles throughout the community.”

To be sure, a long line of politicians, club operators and government regulators have taken runs at ending the practice. Some say the first attempt was made in 1965, after some restaurants were found to be paying cabdrivers $2 a head to bring in customers.

“It’s been going on forever,” said Sheriff Doug Gillespie, who recalled Philips Supper House, which no longer exists but was known for paying a nominal finder’s fee to cabbies for dropping off customers.

County code banned the kickbacks until March 2006. That’s when Commissioners Rory Reid, Tom Collins, Bruce Woodbury and Yvonne Atkinson Gates voted to repeal part of the code banning businesses with liquor licenses from tipping or extending “any form of gratuity to a taxicab driver for the delivery of any passengers to the business location.”

Las Vegas has an ordinance outlawing the practice.

The county vote followed a tense legislative battle in 2005 over cabbie “bounties.” Then-Gov. Kenny Guinn promised to veto a bill that would have outlawed businesses from making payments to cabdrivers. The Legislature’s ban never materialized.

But it might be back.

Marquis represents the various parties, which he would not identify, who have brought the matter to Brown’s attention.

They argue that bounties are bad for Las Vegas. It puts customers in a pressurized situation; cab companies lose control of their drivers, who ignore female customers in favor of male customers. And now massage parlors are starting to pay cabbies for customers, too.

Marquis has worked both sides of the issue. When Philips Supper House was accused of paying $3 a head for customers, he represented the restaurant.

Of the County Commission’s decision four years ago to let the free market take care of the problem, Marquis said: “I don’t think they appreciated at the time the magnitude of the problem created by this practice.”

Cab companies hate the practice, said Gordon Walker, Nevada Taxicab administrator, because it causes drivers to focus almost exclusively on customers they think want to go to a strip club. “So it takes (the driver) out of the normal flow of things,” Walker said.

As a percentage of all the cab rides in Las Vegas, trips to clubs account for a small share, he said. “But it still takes away from providing better service to locals and the main tourist corridor. I think the fines should be very expensive — $10,000 for a first offense, $20,000 after that.”

Marquis has a proposed ordinance that would punish the clubs, not the drivers. It asks for initial fines of $1,000. Three violations in 12 months would result in the revocation of a topless club’s license.

Asked if the rising bounties were the reason behind this latest attempt at regulation, Marquis said that had nothing to do with it. “It’s just bad business all around,” he said.

Taxi union Chief Shop Steward Parker Moffitt of the Industrial Professional Employees Union disagreed. He said the club’s rising payouts are exactly why it has become an issue again.

“If they wouldn’t have started paying these huge amounts in the first place, it wouldn’t be where it is today, we wouldn’t have this issue,” said Moffitt, a cabdriver for Yellow-Checker-Star. “This was never an issue when the clubs were paying $5, $10 a person.”

Moffitt’s union of 1,400 is gearing up for a fight.

“We are working people, we make $20,000 to $30,000 a year, so if the clubs can afford to pay someone $70, $80 to $100 a person, how much money are they making off the customers in order to cover that?” he said. “This is never discussed. This should be talked about.”

Cabdrivers will show up at the commission meeting Tuesday, he predicted, because “taking our money away is not going to help anybody. How is this going to improve anything for anyone?”

Joe Schoenmann can be reached at 455-6175 or at [email protected].

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